What is an Indemnity Bond?

[Bond Guy]

I have heard the term Indemnity Bond thrown around in the insurance business and I was curious do you know what one actually is? Thanks.

[lifeisgood]

You may have misunderstood the term. An Indemnity agreement is something the surety company requires for all bonds. Bonds are not insurance but more like a line of credit for which the surety wants the principle to personally guarantee.

[Bond Magician]

Originally Posted by lifeisgood

You may have misunderstood the term. An Indemnity agreement is something the surety company requires for all bonds. Bonds are not insurance but more like a line of credit for which the surety wants the principle to personally guarantee.

You mentioned an Indemnity Agreement. What does this agreement cover? What is it for?

[lifeisgood]

An indemnity agreement is used for the owners of a company or sole proprietors to personally indemnify themselves for what ever bond they may have in place.